Infosys’s Q1 FY26 results and share price outlook
Introduction
Infosys Ltd. (NSE: INFY) today announced its Q1 FY26 earnings, delivering a solid performance despite macroeconomic and industry headwinds. With revenue and profit growth, raised guidance, and strategic deal wins, Infosys has reaffirmed its competitive edge. Let's dive deep into what the numbers mean for the company and its shareholders.
Q1 FY26 Financial Snapshot
Headline Performance
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Net profit rose ≈9% YoY to ₹6,921 crore, up from ₹6,368 crore in Q1 FY25.
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Revenue increased by 8% YoY to ₹42,279 crore (~$4.94 billion), better than expectations .
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Constant Currency (CC) revenue grew 3.8% YoY, 2.6% QoQ.
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Operating Margin held stable at 20.8%, a slight dip of ~0.3 pp YoY and 0.2 pp QoQ.
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Free Cash Flow was $884 million, representing ~109% of net profit .
Revised FY26 Guidance
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Revenue growth upgraded to 1–3% CC, up from 0–3% previously .
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Maintained margin forecast at 20–22% .
Business Drivers & Deal Wins
Strong BFSI Momentum
The Banking & Financial Services segment grew for the fifth consecutive quarter, buoyed by new wins like Bank of Sydney, Metro Bank, and AIB
Large Deal Wins
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Total Contract Value (TCV) of $3.8 billion, with 55% net-new business, reflecting strong conversions
Q1 FY26 vs Q1 FY25
| Metric | Q1 FY25 | Q1 FY26 | Change |
|---|---|---|---|
| Net Profit | ₹6,368 crore | ₹6,921 crore | +9% YoY |
| Revenue | ₹39,315 crore | ₹42,279 crore | +8% YoY |
| CC Revenue Growth | — | 3.8% YoY / 2.6% QoQ | — |
| Operating Margin | ~21.1% | 20.8% | –0.3 pp YoY |
| Free Cash Flow Conversion |
100% of Net Profit |
109.3% | Maintained |
| TCV Deal Wins | $2.6 billion (Q4 FY25) | $3.8 billion | +46% QoQ |
| Attrition Rate | ~13% (LTM) | 14.4% LTM | +1.4 pp |
| Workforce Addition | +? | +210 employees | Flat growth |
Factors Impacting the Stock Outlook
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Impressive YoY growth despite global IT softness
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Upward guidance signals confidence in demand
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Robust cash flow supports investment and shareholder returns
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Strong deal pipeline, especially in BFSI
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Stable margins, though minor pressure from wage hikes
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Attrition rising, warranting HR focus
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Flat hiring, reflecting cautious capacity expansion
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Macro sensitivity to client discretionary spending
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Tech innovation, especially in AI and digital transformation via Project Maximus
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Forex and tariff risks, though partly offset by CC gains and recent acquisitions
Strategic Outlook & Analyst View
Analyst Commentary
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PhillipCapital, Motilal Oswal, Kotak predicted a positive quarter ahead of results, with revenue growth around 6–7% YoY and margin stability
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BNP emphasized continued strategic focus on revenue and margin balance .
Caution & Market Sensitivity
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Investors were concerned about TCS’s mixed outlook, causing a sector-wide dip earlier in July .
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Despite strong results, market positioning remains cautious given global IT uncertainties.
Conclusion
Infosys’s Q1 FY26 results demonstrate resilience and growth strength, backed by consistent deal wins, robust margins, and improving guidance. While headwinds such as wage increases, attrition, and macro risks persist, solid execution via Project Maximus and BFSI momentum make it a strong player in Indian IT.
For investors, the stock is a core holding in the IT sector, with watchpoints on guidance execution, margin trends, and employee metrics. Continued focus on AI, digital transformation, and deal conversion will be key for future momentum.
